Yahoo Finance Is It Too Late To Consider Buying MaxLinear, Inc. (NYSE:MXL)?
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MaxLinear, Inc. (NYSE:MXL), which is in the semiconductor business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $28.61 at one point, and dropping to the lows of $20.76. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether MaxLinear's current trading price of $22.13 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MaxLinear’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for MaxLinear
What is MaxLinear worth?
MaxLinear appears to be overvalued by 49.49% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$22.13 on the market compared to my intrinsic value of $14.8. This means that the opportunity to buy MaxLinear at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that MaxLinear’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from MaxLinear?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. MaxLinear’s earnings over the next few years are expected to increase by 100%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? MXL’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe MXL should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on MXL for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for MXL, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on MaxLinear. You can find everything you need to know about MaxLinear in the latest infographic research report. If you are no longer interested in MaxLinear, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
